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Tax Time Just Got Easier

And you can thank the IRS.

So goes the cheeky old saw. But this week, I'm going to suggest that as Americans prepare to mail the Internal Revenue Service our quarterly estimated tax payments (what? You say you've got a "real" job? Not self-employed? Lucky duck), we also give a round of applause to the folks who just made tax time easier. Not pleasant, mind you. Just easier.

You see, effective Jan. 1, the IRS is about to institute a new rule requiring that brokerages begin keeping track of how much you pay when you buy a stock -- your "cost basis," in accounting parlance. Seems not all of us keep good track of our investing moves. Some of us even toss our brokerage statements in the shredder (imagine that!). And when we do that, we risk forgetting exactly how much we paid for any given stock between time of purchase and April 15.

Result: A lot of hair-pulling, a lot of guessing at the "right" answers, a lot of fingers crossed in hopes we don't get audited (which is currently the only way the IRS has to confirm that the cost basis we state on our income tax returns, is in fact the price we originally paid for our stocks.)

Charles Schwab is aMotley Fool Stock Advisorrecommendation, but Fool contributorRich Smithdoes not own shares of any company named above. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

Author

I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.